Daily rains down the relentless bombardment of editorial opinions, TV punditry, and general news reminding us once again that we are too deeply in debt – too many of us are drowning in personal debt facilitated by less than forthright lending officers, individual financial illiteracy, and cognizant delusions about future earnings … . All of this is scary enough when it comes to you and me as individuals, but what about the case when it is debt at bankruptcy levels that overwhelms municipalities (like Baltimore MD, Phoenix AZ, San Jose CA, … [further, cf. here]), states (like California, Michigan, New York, … [further, cf. here]), or even entire nations (like Greece, Iceland, Portugal, …[further, cf. here])?

Well, I am no economist, nor am I intimately familiar with that last refuge of the scoundrels among the nation’s chattering gaggles of ‘public intellectuals’, the comforting witchcraft of our era – statistics – but it seems to me fairly self-evident that deficits do matter. We can run up our personal deficits by using plastic, and bonds are the plastic for nations and municipalities. Either way, you’re spending what you don’t have on pointless (e.g., expensive and fashionable clothes, costly vacations, ‘things’) or corrupt ventures (e.g., football stadiums, foreign aid, saving a world that does not want to be saved) and doing so because of your all too often puerile and wishful (as we are now seeing all around us) suppositions that you will earn more ‘later’ and thus can pay it all back ‘later’.

Or go bankrupt.

But how does a nation go bankrupt?

In the days and weeks and months and years to come I guess we shall all get a ring-side show at that bout!

If we had just heeded the wisdom of that proverb: She is rich who owes nothing.

And now, finally, before I am irately taken to task for being an economic illiterate myself, carping about debt as I do, please put aside faux and factitious indignation, and be sensible enough to realize that I am talking about debt that can’t be paid back and that any reasonable person/municipality/state/country would-have/should-have realized is not dischargeable. Debt obviously is a necessary thing in a modern economy, indeed is a very fine instrument in numerous situations – but debt has no place slouching around and lurking about anywhere even near those nasty neighborhoods where illusion, self-deception, and other forms of magical thinking about money and debt rule the mean streets of reality.